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Tuesday, March 15, 2016

ABA Urges Flexibility in HMDA Resubmission Guidelines

ABA, in a joint comment letter with the Consumer Bankers Association, urged the CFPB to ensure it adopts a rational approach as it decides whether to update the guidelines that examiners apply when requiring a financial institution to correct and resubmit Home Mortgage Disclosure Act data. The groups recommended that the current thresholds that apply to whole files be eliminated and that the bureau instead focus on "key" and "non-key" fields and consider errors within a field.

Agreeing that the accuracy of data is important to meet the goals Congress set forth in HMDA, the associations said that 100% accuracy is neither possible nor necessary. With the number of data fields growing from 39 to 110, additional flexibility is critical to ensure that burdens do not outweigh the costs. Instead, the groups recommended that examiners be required to clearly identify an error, determine whether the error affects the integrity of the overall HMDA database, consider whether a warning to avoid repeating the error in the future would be sufficient and weigh the costs and benefits associated with correcting and resubmitting a HMDA Loan/Application Register.

The groups also urged that, if a resubmitted HMDA-LAR is required, data be incorporated into the information that is otherwise publicly available. Finally, the letter strongly recommended that the bureau ensure that other supervisors that review HMDA-LARs for integrity adopt similar or identical procedures to avoid disparities among supervisors.

Read ABA’s comment letter.

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